NonFarm Payrolls


October jobs data to influence the Fed rate outlook for rest of the year

US jobs report post-release checklist – October 4

NFP Actual, Consensus and Deviation Positive Nonfarm Payrolls increased by 254,000 in September, well above the 140,000 expected and accelerating from the 159,000 increase in August.
NFP Revisions Positive Figures for July and August were upwardly revised, with employment levels 72,000 higher than previously reported.
Unemployment rate Positive The Unemployment Rate fell to 4.1% in September, down from 4.2% a month earlier.
Labor Force Participation Rate Neutral The labor force participation rate remained stable at 62.7%.
Average Hourly Earnings Positive Wage inflation, as measured by the change in Average Hourly Earnings, came in above expectations at 0.4% on month and 4% on year.

 

US jobs report pre-release checklist – November 1

Previous Non-Farm Payrolls  PositiveNonfarm Payrolls increased by 254,000 in September, well above the 140,000 expected and accelerating from the 159,000 increase in August.
Challenger Job Cuts  NeutralUS-based employers announced 55,597 job cuts in October, down 23.7% from the 72,821 cuts announced one month prior. However, the figure is 51% higher than the 36,836 cuts announced in the same month a year ago.
Initial Jobless Claims   NeutralThe number of people claiming unemployment benefits for the first time came in at 236,500 (four-week average until October 25), up from the 224,250 four-week average seen at the end of September. Despite the increase, the figures are still low.
Continuing Jobless Claims   NeutralContinuing claims, a proxy for the total number of people receiving unemployment benefits, stood at 1.862 million on the week ending October 18, broadly unchanged from the 1.858 million seen at the end of September.
ISM Services PMI The ISM Services PMI report for October hasn’t been released at the time of the publication of Nonfarm Payrolls data.
ISM Manufacturing PMI        The ISM Manufacturing PMI report for October hasn’t been released at the time of the publication of Nonfarm Payrolls data.
University of Michigan Consumer Confidence Index  PositiveThe University of Michigan Consumer Sentiment Index increased in October for a third straight month to its highest level since April.
Conference Board Consumer Confidence Index  PositiveThe Conference Board Consumer Confidence index surged in October to its highest level since January, and the difference between those saying jobs were plentiful and hard to get rose after eight consecutive monthly declines.
ADP Employment Report  PositivePrivate-sector employment rose by 233,000 in October, well above the 115,000 increase expected and accelerating from the previous month.
JOLTS Job Openings  NeutralJOLTS Job Openings fell more than expected to 7.44 million in September. Still, the data is backward looking as it refers to September and the NFP data is for October.

 

SEPTEMBER US JOBS REPORT REVIEW


July US JOBS REPORT REVIEW


June US JOBS REPORT REVIEW




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BIG PICTURE

The NFP report: The most important economic indicator for the US

NFP Definition

NonFarm Payrolls report measures the number of jobs added or lost in the US economy over the last month. It is released usually on the first Friday of each month, at 8:30 EST. It is published by the US Department of Labor.

This report is important because the US is the largest economy in the world and its currency (US Dollar) is the global reserve currency. The many economies peg (tie) their currency's value to the reserve currency, many commodities such as gold and oil are priced in terms of the reserve currency and the local economy's debt is priced in terms of its own currency.

The NFP report, because of its importance to the reserve currency, tends to move all markets: currencies, equities, treasuries, interest rates and also commodities. It does it so immediately after the release of the economic data and sometimes so dramatically.

US Departament of Labor

The mission of the DOL is to assure the prosperity of the wage earners, job seekers which includes more than 10 million employers and 125 million workers in the USA. 180 federal laws and several federal regulations are the key of the Departament Labor promotion of benefits and rights.

To Trade...

Those who advocate trading NFP releases base their advice on a previous preparation and some fundamental research. The elaboration of some macroeconomical analysis is essential for successful trading.

This research includes averages of past headline NFP numbers, Weekly Jobless Claims, ISM Industry Data reports or other employment reports as the ADP or the Challenger. Tracking these events is fundamental on the preparation of the trades to set up just after the release. You can check all this data on FXStreet Economic Calendar: ADP Report, Initial Jobless Claims, ISM Industry Data.

... Or Not to Trade

A lot more skeptical on the benefits of trading the event, as you can read in his article “Step aside the NonFarm Payrolls release”, Adrián Aquaro, President at Trader College, says its importance has decreased a little bit lately:

“Even if the impact has diminished gradually over time, still generates huge attention on the markets and it normally drives important monthly trends. Lately another event (the Fed Monetary Policy Meetings) has been driving similar attention, thanks mainly to the Interest Rates being at 0%.”

What is a NonFarm Payrolls Forecast?

A NonFarm Payrolls Forecast is some sentiment-based piece of content that tries to predict what the NFP numbers will be and what impact will they have on the markets. In this page, you'll find some articles and tools that will help you to understand which could be the outlook for ADP Report, Unemployment Rate, Average Hourly Earnings, Labor Force Participation Rate and some other important economic indicators.

The ADP (National Employment Report) is an estimation of nonfarm employment which is based on a survey of thousands of private sector businesses. One of the biggest differences between NFP data and ADP data is the sample and methodology of the study. ADP Jobs Report could show us an anticipation of the NFP's trends. Some outlooks are mainly based on the Jobs Report, in past data and in other related job indicators like Initial/Continuing Jobless Claims.